Kosovo shuts 6 Serb bank branches over use of the dinar currency in a move that could raise tensions

PRISTINA, Kosovo -- Kosovo police on Monday closed six branches of a Serbia-licensed bank in line with the decision on the ban of the use of the Serbian dinar currency in the country, a move that has raised tension with neighboring Serbia.

A police statement said they closed the branches of the Postal Savings Bank, following a request from financial institutions on their illegitimacy and based on an authorization from the prosecutor’s office.

Starting on Feb. 1, the government required areas dominated by the ethnic Serb minority in Kosovo to adopt the euro currency, which is used in the rest of the country, and abolished the use of the Serbian dinar.

Pristina postponed the move for about three months, following pressure from the European Union and the United States, concerned that the decision would negatively impact the ethnic Serb minority in northern Kosovo.

Most of Kosovo uses the euro, even though the country isn’t part of the EU. But parts of Kosovo’s north, populated mostly by ethnic Serbs, continue to use the dinar. Many Serbs there rely on the government of Serbia for financial support, often delivered in dinars in cash.

Brussels and Washington are pressing both countries to implement agreements that Serbian President Aleksandar Vučić and Kosovo Prime Minister Albin Kurti reached in February and March last year.

The EU-facilitated normalization talks have failed to make progress, especially following a shootout last September between masked Serb gunmen and Kosovo police that left four people dead and ratcheted up tensions.

Serbia and Kosovo have both said they want to join the EU, but the bloc’s foreign policy chief, Josep Borrell, has warned that their refusal to compromise is jeopardizing their chances.

Serbian forces fought a 1998-99 war with ethnic Albanian separatists in what was then the province of Kosovo. About 13,000 people, mostly ethnic Albanians, died until a 78-day NATO bombing campaign pushed Serbian forces away. Kosovo declared independence in 2008, which Belgrade doesn’t recognize.